Risk and Profitability of Islamic Banking in Indonesia : Granger Causality Test

Authors

  • Adrianna Syariefur Rakhmat Universitas Pelita Bangsa
  • Preatmi Nurastuti Universitas Pelita Bangsa
  • Mohammad Hatta Fahamsyah Universitas Pelita Bangsa

Keywords:

Risk, Profitability, Granger Causality, Islamic Banking

Abstract

This research discusses the two-way relationship between financing risk and profitability in Islamic banks. This research is a quantitative study. The data used is secondary data sourced from the Financial Services Authority regarding Islamic Bank Financing Risk or Non-Performing Financing (NPF) and Islamic Bank Profitability or Return on Assets (ROA) in June 2014-June 2023. This research tests the two-way relationship between NPF and ROA using the Granger Causality Test. This research finds that there is only a one-way relationship between ROA and NPF.

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Published

2023-09-30

Issue

Vol. 1 No. 01 (2023): September 2023

Section

Articles